House prices in the State are overvalued by up to 10 per cent, according to the Central Bank.
In its winter bulletin, the bank expressed concern at the rate of house price increases in the face of slowing economic growth and easing inflation.
"While increases in prices have slowed somewhat recently, they are still relatively strong in the context of more subdued economic growth, employment increases and the improving outlook for inflation," the bank said.
The bank also noted that house prices have risen by over 300 per cent in the 10 years since 1993 while building costs increased by only 80 per cent over the same period.
The difference has gone into spiralling land costs and greater profit margins for builders, according to the bank.
House prices rose by 1.4 per cent across the State in October, contributing to a 11 per cent average rise across the State in the 10 months to October. Year-on-year the price rise is 13.9 per cent.
House price rises will be in single figures next year, according to the bank.